THE country’s balance of payments (BoP) registered a deficit in June, as the government made principal and interest payments on its foreign debts, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

Latest available central bank data showed that BoP — a summary of the Philippines’ economic transactions with the rest of the world for a given period — stood at a $404-million deficit in June from the $1.177-billion deficit in the same month in 2018.

On a month-on-month basis, the BoP position swung from a $928-million surplus tallied in May. The last time the BoP position was in a deficit was in October 2018.

Still, the balance of payments stood at a $4.788-billion surfeit in the first half of 2019, a turnaround from the $3.257 billion deficit during the same period a year ago.

“The substantial outflow in June 2019 stemmed from the principal and interest payments of the National Government (NG) on its foreign exchange obligations. This outflow was partially tempered, however, by the NG’s net foreign currency deposits, and the BSP’s foreign exchange operations as well as income from its investments abroad during the month in review,” the central bank said.

As the country’s monetary authority, the BSP sometimes conducts “tactical interventions” to temper any sharp swings that may cause the peso to appreciate or depreciate.

Meanwhile, the BoP surplus in the first semester was partly attributed to remittance flows from overseas Filipinos in the first five months of the year and net inflows of foreign direct investments (FDI) in the January-April period.

Cash sent home by Filipinos overseas grew 4.5% to $12.349 billion in the five months ended May from the $11.822 billion booked during the comparable period in 2018.

On the other hand, FDI net inflows in the first four months stood at $2.903 billion, 14% less than the $3.377 billion recorded in 2018’s January-April period.

“The BoP position reflects the final gross international reserves (GIR) level of $85.77 billion as of end-June,” the BSP said. “At this level, the GIR represents a more than ample liquidity buffer and is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.”

The GIR level is also equivalent to 5.1 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity, the central bank added.

Michael L. Ricafort, economist at Rizal Commercial Banking Corp. said the BoP deficit in June may “reflect some net foreign selling in the local stock market as well as higher global oil prices that may have increased oil imports.”

The central bank expects the country to post a BoP surplus of $3.7 billion this year versus its previous projection of a $3.5-billion gap.

The Philippines ended 2018 with a $2.306-billion BoP deficit. — Karl Angelo N. Vidal